May 31, 2011

Cooperator in FCPA Sting Case Testifies For Government

A military equipment dealer and certified public accountant who pleaded guilty to participating in a foreign bribery conspiracy testified today for the government that it was clear to him that a $15 million deal with Gabon involved an illegal payment.

The cooperator, Jonathan Spiller, represented by O'Melveny & Myers partner Kenneth Wainstein, pleaded guilty in March in U.S. District Court for the District of Columbia. Spiller agreed to testify against four men on trial for their alleged roles in the same bribery conspiracy.

Prosecutors allege the participants agreed to inflate artificially the sales price of equipment and other items being sold to the west African nation of Gabon. The authorities arrested 22 people in the undercover sting in January 2010. Spiller faces up to five years in prison for conspiracy. Sentencing guidelines call for a range of 37 to 46 months in prison, court records show.

Laura Perkins, a fraud section trial attorney for the U.S. Justice Department, played for jurors today secretly recorded audio and video of meetings that included Spiller and the government's lead informant, Richard Bistrong.

In one call, an undercover FBI agent posing as a procurement officer for Gabon said the defense minister thanked Spiller for his commission. Perkins asked Spiller, owner of JM Spiller & Associates, in Florida, whether he was surprised a Gabonese official had received a payment.

“No,” Spiller responded. “Because we’d been told that was part of the deal.” He said in another response to Perkins that it was “not unclear to me at all” that the commission going to the defense minister was an illegal payment under the Foreign Corrupt Practices Act.

Spiller today recounted the trip to Las Vegas in January 2010 in which participants in the deal were planning to meet the new defense minister of Gabon and receive payment for the second phase of the deal. Spiller said he was “very excited.”

But no money was exchanged. Instead, Spiller and 20 others were arrested on charges of violating the FCPA. Federal agents interrogated Spiller for hours the day of his arrest. And he would meet with prosecutors again months later, agreeing then to cooperate for the government.

Spiller told a lawyer for defendant Pankesh Patel, Matthew Menchel, that he spent hours with prosecutors preparing for his trial testimony. Spiller said he did not recall seeing any reports of his interviews with federal agents.

At the advice of counsel, Spiller declined to grant an interview with the defense lawyers prior to his testimony in Washington federal district court.

When Menchel asked Spiller about a meeting with prosecutors in February, Spiller said he did not recall the substance of the discussion. Menchel suggested prosecutors would have frowned against such an interview.

“I think I’ve been truthful the whole way through,” Spiller said in one exchange with Menchel, former chief of the criminal division in the U.S. Attorney’s Office for the Southern District of Florida.

Spiller is a former partner at the accounting firm Deloitte & Touche, where he spent 18 years. He made partner in 1982.